Renting in Spain now eats up 38% of wages as housing crisis worsens
New figures show renting costs far more than buying in most Spanish cities
Renting a typical two bedroom home in Spain now takes an average 38% of a household’s net monthly income, according to new figures from property portal Idealista.
That is well above what most financial advisers consider sensible. Housing is often recommended to stay within 20% to 25% of your budget, and once it creeps past 30% many experts say you are financially stretched.
Across much of Spain, that line has not just been crossed, it has been left far behind.
The data shows renting is currently more demanding than buying in 48 of Spain’s 50 provincial capitals. On average, mortgage payments would account for 26% of household income, compared to the 38% needed for rent. Buying may look cheaper month to month, but of course that does not factor in the large deposits and upfront costs required by banks.
In some of the country’s biggest cities, the pressure is even more intense. Renting a two bedroom flat absorbs 46% of income in Barcelona and 40% in Valencia. Palma sits at 43%, Málaga at 41% and Madrid at 40%. In these areas, close to half of take home pay can vanish on rent alone.
And sadly, buying just isn’t an option anymore for so many people, despite recent wage increases, as property prices have continued to climb. Resale homes rose by 16.2% last year to an average €2,639 per square metre, which means an 80 square metre flat now costs around €211,120.
Rental prices increased by 8.5% over the same period, reaching €14.7 per square metre, or about €1,176 per month for a similar sized home.
Only Palma and San Sebastián buck the national trend, where buying requires a bigger share of income than renting. In San Sebastián, average prices have reached €6,450 per square metre, putting an 80 square metre flat at more than €516,000 and pushing mortgage effort up to 37% of income.
There are still parts of Spain where housing is far more manageable. In 29 provincial capitals, buying a home takes less than 20% of average income. Lleida and Jaén are the most affordable at around 13%, and in Jaén and Ciudad Real rent also remains under 20%.
For many families across Spain, though, the reality is that renting now eats up far more than the recommended share of income, leaving less room for savings, bills and everything else that comes with everyday life.
Image: Freepik
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